Active cryptocurrency trading strategies can be used by both beginners and experienced traders alike. This article contains 5 active trading strategies that work well for both beginner and advanced traders.
Crypto trading has become very popular over the past few years.
It’s a fast-growing market where investors can earn money without actually owning any cryptocurrencies.
In fact, most crypto traders don’t even own any cryptocurrency themselves. They simply trade digital currencies such as Bitcoin, Ethereum, Ripple, Litecoin, etc.
There are several strategies that can be used to profit from crypto trading.
Here are some of the most common ones:
1. Buy Low & Sell High
This strategy involves buying low and selling high. This means that you buy cryptocurrencies at a low price and sell them at a higher price.
For example, let’s say you bought 1 BTC for $10,000 and sold it for $20,000. That would mean that you made $10,000 profit.
However, if you had bought 1 BTC for $20,000 and then sold it for $30,000, you would have lost $10,000.
So, basically, you’re trying to find a balance between buying low and selling high to maximize profits.
2. Short Selling
Short selling is another popular crypto trading strategy.
With short selling, you borrow a cryptocurrency from a broker and sell it immediately. Then, you return the borrowed cryptocurrency to the broker.
When you do this, you hope that the value of the cryptocurrency will drop so that you can buy back the same amount of cryptocurrency at a cheaper rate.
3. Leverage Trading
Leveraged trading is similar to short selling except that you borrow a larger amount of cryptocurrency than what you plan to sell.
Then, you use the borrowed cryptocurrency to purchase additional cryptocurrency.
Once you’ve purchased enough cryptocurrency, you sell it to generate a profit.
4. Margin Trading
Margin trading is similar to leverage trading except that you borrow a smaller amount of cryptocurrency than what is required to execute the trade.
The difference is that margin trading requires a minimum deposit before you can begin trading.
5. Technical Analysis
Technical analysis is a method of analyzing charts and graphs to determine whether a cryptocurrency is about to rise or fall in value.
Some people think that technical analysis is outdated and useless, but there are still many successful traders using this technique.
6. Fundamental Analysis
Fundamental analysis is an approach that focuses on the underlying factors that drive a particular asset.
It includes things like supply and demand, economic growth, inflation rates, interest rates, and much more.
7. Automated Trading Robots
An automated trading robot is a software that automatically executes trades based on certain criteria.
These robots are usually programmed to follow specific rules and algorithms.
They can be used to automate repetitive tasks and increase productivity.
8. Cryptocurrency Exchanges
A cryptocurrency exchange is a website that allows users to buy and sell cryptocurrencies.
Most exchanges offer different types of services including margin trading, leveraged trading, and futures contracts.
9. Cloud Mining
Cloud mining is a type of cryptocurrency mining that uses cloud computing resources instead of physical hardware.
You can mine cryptocurrencies using your computer, smartphone, tablet, or laptop.
You just need to pay a monthly fee to access these resources.
10. ICOs (Initial Coin Offerings)
An initial coin offering is a fundraising event where new companies raise funds by issuing their own tokens.
ICOs allow startups to bypass traditional venture capital funding models.
Staking is a process where you lend out your coins to other users in order to receive rewards.
This is done through a decentralized platform called IOST.
12. Dividend Investing
Dividend investing is when investors invest in stocks with the expectation that they’ll earn dividends over time.
13. Index Fund
An index fund is a mutual fund that invests in multiple assets such as stocks, bonds, commodities, currencies,
These are just a few of the active trading strategies.